TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Saturday, September 30, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Do BigLaw Partners Qualify For Trump's 25% Rate On Income From Pass-Through Entities?

Tax ReformAmerican Lawyer, Law Firms, Partners Await Answers on Trump Tax Plan:

Will big law firms and their partners benefit from the new Republican tax plan promoted by President Donald Trump? Not necessarily, according to tax experts who said some gains may be eroded by loss of crucial deductions.

The one thing tax experts all agree on is that the proposed framework is very short on details and not clear enough to make any conclusions.

In one of its general statements, the framework said it would limit the maximum tax rate applied to the business income of small and family-owned businesses conducted as sole proprietorships, partnerships and S corporations — known as pass through entities — to 25 percent.

So if a law firm qualified — and that’s a big if — partners who pay 39.6 percent may pay 25 percent instead.

But the framework suggests this is only for small businesses, and tax experts said large law firms probably wouldn’t be included in that group.

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September 30, 2017 in Legal Education, Tax | Permalink | Comments (0)

California Lawmakers Approve Bill Requiring Presidential Candidates To Release Five Years Of Tax Returns

Trump Tax ReturnsABA Journal, California Lawmakers Approve Bill Requiring Presidential Candidates to Release Tax Returns:

Presidential candidates who want to appear on the California ballot would have to release their tax returns if a bill passed earlier this month is signed into law.

Senate Bill 149 passed on Sept. 15 despite questions about its constitutionality, report the San Jose Mercury NewsBloomberg BNA and an op-ed in the Los Angeles Times.

The bill requires presidential candidates on the ballot to release five years of tax returns. A redacted version would be posted online.

The deadline for California Gov. Jerry Brown to sign or pass the bill is Oct. 15, but it’s unclear what he will do. Brown released his tax returns in his first two gubernatorial races, but didn’t do so in 2010 or 2014 when his opponents didn’t release theirs.

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September 30, 2017 in Tax | Permalink | Comments (2)

Law’s Picture Books: Illustrating The Letter Of The (Tax) Law

YaleWall Street Journal, ‘Law’s Picture Books: The Yale Law Library Collection’: Illustrating the Letter of the Law:

Picture books about the law are as superfluous as songs about economics. In legal codices and textbooks, illustrations can even seem frivolous. Before visiting the Grolier Club’s exhibition Law’s Picture Books: The Yale Law Library Collection, you might also believe this is as it should be: Justice typically devalues the visual. Not for nothing is Lady Justice blindfolded — as we see in many texts displayed at this unusual exhibition. The law library’s rare book librarian, Michael Widener, has been collecting illustrated law books for the institution, and now he and his co-curator, the legal scholar Mark S. Weiner, have offered an eye-opening survey of that specialty.

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September 30, 2017 in Book Club, Legal Education, Tax | Permalink | Comments (1)

Friday, September 29, 2017

Weekly SSRN Tax Article Review And Roundup

This week, David Gamage (Indiana) reviews a new draft article by Allison Christians (McGill Law), Buying in: Residence and Citizenship by Investment.

Gamage (2017)Want to buy yourself a citizenship?  According to Christians’s new draft article, doing so from Panama would cost you $5,000 USD, doing so from the United Kingdom would cost you $62,525 USD, and doing so from Singapore would cost you $1,794,000 USD.

Would this be worth the cost?  Christians discusses how some of these nations hope to attract wealthy citizens from other nations.  However, emigrating from the U.S. is harder to accomplish, at least from a tax perspective, due the U.S. practice of taxing its citizens on worldwide income.  Christians thus also discusses barriers to exit, again from a citizenship tax perspective. 

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September 29, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Weekly Legal Education Roundup

Facing Poverty, Academics Turn to Sex Work And Sleeping In Cars

AdjunctFollowing up on my previous posts on the plight of adjunct professors (links below):  The Guardian, Facing Poverty, Academics Turn to Sex Work and Sleeping in Cars:

Adjunct professors in America face low pay and long hours without the security of full-time faculty. Some, on the brink of homelessness, take desperate measures

There is nothing she would rather do than teach. But after supplementing her career with tutoring and proofreading, the university lecturer decided to go to remarkable lengths to make her career financially viable.

She first opted for her side gig during a particularly rough patch, several years ago, when her course load was suddenly cut in half and her income plunged, putting her on the brink of eviction. “In my mind I was like, I’ve had one-night stands, how bad can it be?” she said. “And it wasn’t that bad.”

The wry but weary-sounding middle-aged woman, who lives in a large US city and asked to remain anonymous to protect her reputation, is an adjunct instructor, meaning she is not a full-time faculty member at any one institution and strings together a living by teaching individual courses, in her case at multiple colleges.

“I feel committed to being the person who’s there to help millennials, the next generation, go on to become critical thinkers,” she said. “And I’m really good at it, and I really like it. And it’s heartbreaking to me it doesn’t pay what I feel it should.”

Sex work is one of the more unusual ways that adjuncts have avoided living in poverty, and perhaps even homelessness. A quarter of part-time college academics (many of whom are adjuncts, though it’s not uncommon for adjuncts to work 40 hours a week or more) are said to be enrolled in public assistance programs such as Medicaid.

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September 29, 2017 in Legal Education | Permalink | Comments (5)

Law School Student Loan Default Rates

ABA Journal (2014)ABA Journal, Which Law Schools Had Highest Loan Default Rates for Fiscal Year 2014? (Updated): 

Six freestanding law schools recorded student loan default rates greater than 2 percent for Fiscal Year 2014, according to data released Wednesday by the U.S. Department of Education.

The Institute for College Access & Success, a nonprofit group that works to increase the public’s understanding of student debt, designed a sortable spreadsheet with the Department of Education data. Based on that offering, freestanding law schools with the largest percentages of student loan defaults for fiscal year 2014 were:

1. Massachusetts School of Law (4.8%)
2. Thomas Jefferson (3.8%)
3. Appalachian (2.9%)
4. San Joaquin College of Law (2.6%)
5. Thomas Cooley (2.5%)
6. John Marshall (Atlanta) (2.3%)

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September 29, 2017 in Legal Education | Permalink | Comments (22)

Lesson From The Tax Court: The Overlooked Power Of Offset

Tax Court (2017)Last week the Tax Court issued an opinion in Williams v. Commissioner, T.C. Memo 2017-182.  Although it involves small amounts, the opinion teaches a big lesson about the IRS power of offset

Mr. Williams filed his 2013 return reporting $503 of taxable income and withholding of $1,214.  So he claimed an overpayment of $711.  The IRS accepted his return as filed but did not refund the $711.  Instead, it used its offset powers under section 6402(a) to credit that supposed $711 overpayment against Mr. Williams' unpaid tax liabilities from 2011.  Later, the IRS audited Mr. Williams' return and proposed a deficiency of $1,403.  Mr. Williams' protest to Tax Court was not the usual one.  He agreed with the amount of the deficiency, but he thought that since there was not actually an overpayment, per the audit, then the IRS should not have credited that $711 to his 2011 liability but should instead apply it to his 2013 liability.  After all, it was part of the wage withholding for 2013.  Note that it was to Mr. Williams' benefit to pay off the most recent tax liabilities to increase the chances that the older ones would age out.

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September 29, 2017 in Bryan Camp, New Cases, Tax, Tax Practice And Procedure | Permalink | Comments (2)

Simkovic: The Law School Monopoly Myth

Michael Simkovic (USC), The Law School Monopoly Myth:

It is often assumed that the only way to become a lawyer is to attend an ABA-approved law school.  That is true in some states and, indeed, the ABA has at times expressed the view that it should be true in all states.  But it is not the case in large jurisdictions such as New York or California, nor is it the case in the majority of jurisdictions.  Claims that ABA-approved law school have a monopoly on entry into the legal profession are exaggerations.  Rather, the most popular — and probably most likely — way to become a lawyer is to graduate from an ABA-approved institution.  ...

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September 29, 2017 in Legal Education | Permalink | Comments (0)

Mann:  Controlling The Environmental Costs Of Obesity

Roberta F. Mann (Oregon), Controlling the Environmental Costs of Obesity, 47 Envt'l L. 697 (2017):

Obesity is increasingly viewed as a major health problem across the world. Obesity presents both external and internal costs. Obesity alone may be responsible for some $2 trillion in medical costs and lost productivity, representing significant external costs. Internal costs occur because people make eating and drinking choices without being aware of the eventual damage to their health. Obesity also carries environmental costs. Consumption of certain energy-dense foods made from corn and soy (including meat) increases soil erosion and water pollution from fertilizer use. Governmental policy encourages the production of such crops. Being overweight decreases physical activity and personal mobility, leading to increased use of motor vehicles. Environmental factors such as sprawl and transportation policy affect obesity rates. When people cannot walk or take public transportation to work, they spend more time in their cars. They have less time to exercise and prepare healthy meals. Hence, both obesity’s effect on the environment and the environment’s effect on obesity lead to increased carbon emissions and exacerbate climate change. Taxes can potentially control both the external and internal costs of obesity. By increasing the cost of certain foods, taxes can discourage their consumption. A number of national and subnational jurisdictions have enacted such taxes, including Denmark, Finland, France, Mexico, the Navajo Nation, and the city of Berkeley, California in the United States.

This Article will examine a variety of economic instruments for controlling obesity, including regulation, taxes, and nudges.

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September 29, 2017 in Scholarship, Tax | Permalink | Comments (0)

Thursday, September 28, 2017

Kleinbard: The Republican Tax 'Plan' Is A Deficit-Busting Mess

Vox op-ed:  The Republican Tax “Plan” Is a Deficit-Busting Mess. And It Would Slash the President’s Taxes, by Edward Kleinbard (USC):

Here is what you need to know about the Republican tax plan released Wednesday: It’s not a tax reform plan at all.

It is a sketch of an outline of a preliminary notion of a tax cut for some — and a tax hike for others. The components read like the jumble of ideas you might expect a table of slightly inebriated Chamber of Commerce types to shout out when polled for their tax reform suggestions.

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September 28, 2017 in Tax | Permalink | Comments (3)

McArdle: It Shouldn't Be So Easy To Go To Grad School

Bloomberg View:  It Shouldn't Be So Easy to Go to Grad School, by Megan McArdle:

Universities are milking the huge loan sums from grad students to subsidize the cost of undergraduate degrees. This system is broken.

Almost 20 years ago, when I was applying to MBA programs, the conventional wisdom was that unless you could get into a top-10 program, 1 you probably shouldn’t go. The tuition at a high-ranking program was steep (I would eventually graduate with nearly $100,000 in debt), but if you managed to get in, recruiters for six-figure jobs would swarm onto campus and practically beg you to work for them.

The tuition at lower-level schools was also very steep, but students had to frantically labor to secure a job afterwards. Some found jobs that were no better than the jobs they’d left to go to business school. The lower the ranking of the school, the less value the graduates got out of their degree, until you got down to programs that seemed to mostly be run for the benefit of the university that was collecting the tuition check.

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September 28, 2017 in Legal Education | Permalink | Comments (1)

Bartlett: I Helped Create The GOP Tax Myth. Trump Is Wrong: Tax Cuts Don’t Equal Growth

Washington Post op-ed:  I Helped Create the GOP Tax Myth. Trump Is Wrong: Tax Cuts Don’t Equal Growth, by Bruce Bartlett:

Four decades ago, while working for Rep. Jack Kemp (R-N.Y.), I had a hand in creating the Republican tax myth. Of course, it didn’t seem like a myth at that time — taxes were rising rapidly because of inflation and bracket creep, the top tax rate was 70 percent and the economy seemed trapped in stagflation with no way out. Tax cuts, at that time, were an appropriate remedy for the economy’s ills. By the time Ronald Reagan was president, Republican tax gospel went something like this:

  • The tax system has an enormously powerful effect on economic growth and employment.
  • High taxes and tax rates were largely responsible for stagflation in the 1970s.
  • Reagan’s 1981 tax cut, which was based a bill, co-sponsored by Kemp and Sen. William Roth (R-Del.), that I helped design, unleashed the American economy and led to an abundance of growth.

Based on this logic, tax cuts became the GOP’s go-to solution for nearly every economic problem. Extravagant claims are made for any proposed tax cut. Wednesday, President Trump argued that “our country and our economy cannot take off” without the kind of tax reform he proposes. Last week, Republican economist Arthur Laffer said, “If you cut that [corporate] tax rate to 15 percent, it will pay for itself many times over. … This will bring in probably $1.5 trillion net by itself.”

That’s wishful thinking. So is most Republican rhetoric around tax cutting. In reality, there’s no evidence that a tax cut now would spur growth. ...

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September 28, 2017 in News, Tax, Tax Policy in the Trump Administration | Permalink | Comments (2)

Chodorow:   One Of Ted Cruz’s Favorite Ideas To 'Simplify' The Tax Code Is An Attack On The Corporate Income Tax

Slate:  One of Ted Cruz’s Favorite Ideas to “Simplify” the Tax Code Is Really an Attack on the Corporate Income Tax, by Adam Chodorow (Arizona State):

During the campaign, Donald Trump told us he knew the tax code better than anyone and promised that he alone could fix it. Now his party is finally poised to take on tax reform. As with health care, Trump has offered no details and issued contradictory statements. (After promising big tax cuts for all, he’s more recently stated that the wealthy won’t benefit from reform.) So what can we expect from the plan Republicans say they’ll release this week? One possibility touted by the conservative Tax Foundation and recently floated by Texas Sen. Ted Cruz is immediate expensing, which would allow businesses to deduct the cost of any assets they acquire right away.

Expensing sounds like a simple accounting change and is being sold as a way to simplify the tax code. In fact, it represents a direct attack on the idea of a corporate income tax, one that provides a significant and unwarranted tax break to a small subset of favored entities. It could also fundamentally alter how our tax system works. ...

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September 28, 2017 in Tax | Permalink | Comments (2)

2018 Wall Street Journal/Times Higher Education College Rankings

WSJ THE2018 Wall Street Journal/Times Higher Education College Rankings (methodology):

Outcomes (40%):

  • Graduation rate (11%)
  • Value added to graduate salary (12%)
  • Value added to the loan repayment rate (7%)
  • Academic reputation (10%)

Resources (30%):

  • Finance per student (11%)
  • Faculty per student (11%)
  • Research papers per faculty (8%)

Engagement (20%):

  • Student engagement (7%)
  • Student recommendation (6%)
  • Interaction with teachers and students (4%)
  • Number of accredited programmes (3%)

Environment (10%):

  • Proportion of international students (2%)
  • Student diversity (3%) 
  • Student inclusion (2%)
  • Staff diversity (3%)

The second annual WSJ/THE rankings list over 1,000 schools. Here are the Top 10:

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September 28, 2017 in Law School Rankings, Legal Education | Permalink | Comments (0)

Seven Tax Profs Arrested On Corruption Charges In Rigging Academic Research Award

The Italian Insider, Professors Arrested on Corruption Charges:

Seven university professors of tax-law have been arrested on charges of corruption as part of a national investigation into rigged competitions for research posts.

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September 28, 2017 in Legal Education, Tax | Permalink | Comments (3)

'Clickbait' Is Corrupting Scholarship: 'The Academe Has Been Hacked By Scholars And Journals Looking To Up Their Citation And Impact Numbers'

ClickbaitInside Higher Ed, ‘Colonialism’ Article Flap Highlights Push for Transparency in Publishing:

“The [article] is a travesty, the academic equivalent of a Trump tweet, clickbait with footnotes.”

Third World Quarterly is in no hurry to pull The Case for Colonialism, despite author Bruce Gilley’s request last weekthat the journal withdraw his contentious essay.

Many see transparency in scholarly publishing as lacking across journals, but it’s particularly germane to the Third World Quarterly debate. That's because critics of the journal have charged that it published Gilley’s article, against the advice of expert reviewers, as “clickbait.” ...

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September 28, 2017 in Legal Education, Scholarship | Permalink | Comments (1)

Tax Code Statutes With No Hammer?

Generally, the Tax Code contains statutory consequences for taxpayers who fail to obey statutory commands.   Most of those statutory consequences are in the form of: "Additions to Tax" found in sections 6651-6658; "Accuracy-Related and Fraud Penalties" found in sections 6662-6664; "Assessable Penalties" found in sections 6671-6725; and, of course, all the various criminal and forfeiture statutes found in 7201-7345.

But what about statutory commands imposed on the IRS?  It turns out not all such commands carry a statutory hammer.  Let me give one example.  When the IRS assesses a tax and the tax is unpaid, section 6303 requires the IRS to send the taxpayer notice and demand for the unpaid tax within 60 days of the assessment.  But the statute is silent as to what consequence, if any, should occur if the IRS sends the notice and demand later than 60 days.  Treas. Reg. 301.6303-1 provides "the failure to give notice within 60 days does not invalidate the notice."

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September 28, 2017 in Bryan Camp, Tax, Tax Practice And Procedure | Permalink | Comments (3)

Wednesday, September 27, 2017

Yin Presents Tax Law Codification And The Emergence Of The Joint Committee On Taxation Staff Today At Penn

Yin (2015)George Yin (Virginia), presents Codification of the Tax Law and the Emergence of the Staff of the Joint Committee on Taxation at Pennsylvania today as part of its Tax Policy Workshop Series hosted by Chris Sanchirico and Reed Shuldiner:

In 1926, Congress created the Joint Committee on Taxation (JCT) and its staff. This article explains how, partly by design but largely by happenstance, the JCT staff helped change the nature of the legislative process. By serving at or near the intersection of three great divides in government — those between the parties, the houses of Congress, and the legislative and executive branches — the staff demonstrated the value of unelected professionals assisting directly in the formation of legislation and led Congress to rely more on its own resources in the legislative process rather than those of the executive branch.

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September 27, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Lukic Presents The Taxation On Goods And Services In Brazil Today At Toronto

LukicMelina Rocha Lukic (Getulio Vargas Foundation (FGV) Law School, Brazil) presents The Taxation on Goods and Services in Brazil: The Canadian System as a Model? at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

The paper aims to analyze the possibility to implement a VAT system in Brazil based on the Canadian GST system. The tax system of goods and services in Brazil is composed of several taxes that were divided according to different bases (distribution of goods, services provisions, industrialization and revenue/turnover). The competence for imposition and collection was distributed to the three federal entities: Federal Government, States and Municipalities. This peculiarity — segmentation of the tax bases and several taxes levied on the same basis — causes various problems and obstacles to Brazilian system, as we describe in the paper.

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September 27, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The Crit Classroom, A Battlefield: Lessons From The Student Walkout In Greg Mankiw's Harvard Econ Class

Aníbal Rosario Lebrón (Howard), If These Blackboards Could Talk: The Crit Classroom, a Battlefield, 9 Charleston L. Rev. 305 (2015):

“You hear it said that fathers want their sons to be what they feel they themselves cannot be, but I tell you it also works the other way.”

With those simple words in one of the most heartfelt self-discovery stories in “American” literature, Sherwood Anderson subtly unmasked how yearnings and aspirations are a two-way street. As parents project their aspirations upon their children, so do their children upon them. The same holds true for teachers and students, especially in legal academia. As law professors, we have a specific idea of what type of learners and legal professionals law students should be; but just as daughters and sons, law students also have in their minds an ideal law professor.

However, when these aspirations and ideals do not correspond with each other, conflict usually ensues, as it did for the young man in Sherwood Anderson's Discovery of a Father. This conflict puts a strain on any relationship and creates a tense atmosphere that can dampen communication. In the case of parents and their children, this might be resolved with time or a serendipitous event that reopens the communication channels and sheds light on the reasonableness of their yearnings--as a young Sherwood discovered himself. Yet, in the classroom, time is always pressing and those types of serendipitous events are scarce. 

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September 27, 2017 in Legal Education | Permalink | Comments (2)

Helge: Why The IRS Denies Tax Exemption To 501(c)(3) Applicants

Terri Lynn Helge (Texas A&M), Rejecting Charity: Why the IRS Denies Tax Exemption to 501(C)(3) Applicants, 14 Pitt. Tax. Rev. 1 (2016):

New charitable organizations generally must file an application for exemption (Form 1023) and await approval from the Internal Revenue Service. Unfortunately, the criteria the Internal Revenue Service uses to evaluate applications has not always been transparent. If an application is approved, the Internal Revenue Service determination letter and the application for exemption are required to be made publicly available and can be requested from the Internal Revenue Service or the organization itself. Prior to 2004, in the case of denials, neither the application nor the Internal Revenue Service’s correspondence setting forth its rationale for the denial were made publicly available.

This project is the first of its kind. While others have commented on isolated denial letters, this study is the first to conduct a comprehensive analysis of the Internal Revenue Service denial letters issued from when they first became available in 2004 through January 31, 2017.

Table 1B

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September 27, 2017 in Scholarship, Tax | Permalink | Comments (0)

Burke: Exploiting The Medicare Tax Loophole

Karen C. Burke (Florida), Exploiting the Medicare Tax Loophole:

Section 1411 imposes a 3.8 percent surtax on investment income of high earners that mirrors Medicare taxes on earned income. The enactment of the net investment income tax highlights gaps in the employment tax rules for passthrough entities — particularly limited partnerships, S corporations, and limited liability companies. This article considers how businesses can be structured to allow active high-income owner-employees of passthrough entities to avoid all three of the 3.8 percent Medicare taxes (SECA, FICA and section 1411).

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September 27, 2017 in Scholarship, Tax | Permalink | Comments (0)

Georgetown Law Profs Take A Knee To Protest Jeff Sessions' Appearance On Campus To Discuss Free Speech

Georgetown

Huffington Post, Georgetown Law Faculty Take A Knee To Protest Jeff Sessions’ Campus Visit:

In what may be a first, a style of protest that started in the NFL has spread directly to ... Georgetown Law.

Faculty members at the prestigious law school took a knee Tuesday morning in dissent of a visit by Attorney General Jeff Sessions, who was on campus to “give remarks about free speech.”

Professors at the school have vociferously opposed the visit by Sessions. In an open letter published ahead of the event, signed by around a third of the law school’s faculty, professors lambasted it as “hypocritical” and “troubling.”

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September 27, 2017 in Legal Education | Permalink | Comments (9)

Follow Up On § 7434 Suits For Filing False Information Returns

ABA Tax Section (2017)I previously blogged about a great panel presentation I attended at the Fall ABA Tax Section Meeting in Austin. The presentation was about how to sue someone under § 7434 for filing a false information return.

This past week one of the panelists, Stephen Olson, has blogged more about this subject here and here.  The blogs are worth calling to your attention. He dives a bit deeper into this subject to look at whether an Information Return that states the correct payment amount but is otherwise false and misleading, is sufficient to support suit under § 7434.

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September 27, 2017 in ABA Tax Section, Bryan Camp, Tax, Tax Practice And Procedure | Permalink | Comments (0)

India Eyes Spending Cuts As Glitches In New Tax Hit Revenue

Reuters, India Eyes Spending Cuts as Glitches in New Tax Hit Revenue 

India could be forced to cut spending on key infrastructure such as railways and highways as lower-than-expected tax collections and sluggish growth have upset the government’s budget calculations, two finance ministry officials said.

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September 27, 2017 in Tax | Permalink | Comments (0)

Tuesday, September 26, 2017

Homonoff Presents The Timing Of SNAP Issuance, Food Expenditures, And Grocery Prices Today At Columbia

HomonoffTatiana Homonoff (NYU) presents Is There an Nth of the Month Effect? The Timing of SNAP Issuance, Food Expenditures, and Grocery Prices (with Jacob Goldin (Stanford) & Katherine Meckel (Texas A&M)) at Columbia today as part of its Davis Polk & Wardwell Tax Policy Colloquium Series hosted by Alex Raskolnikov and Wojciech Kopczuk:

Previous research on the Supplemental Nutrition Assistance Program (SNAP) suggests that participants consume more food on days immediately following benefit issuance, prompting retailers to raise food prices to capture a portion of the transfer. Partly in response to such findings, some have called for states to stagger benfit issuance over multiple days of the month. To study the effect of staggering benefits, we link variation among states in the timing of benefit issuance to a large panel of transaction-level data from households and retailers. We document large intra-month cycles in food expenditures among SNAP-eligible households that closely track state issuance policies. However, we rule out economically signficant effects on retailer pricing, which suggests that staggering benfits would not meaningfully shape the incidence of SNAP benfits.

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September 26, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Perry Fleischer And Leff Present Tax Papers Today At Basic Income Earth Network Annual Congress In Lisbon

BienMiranda Perry Fleischer (San Diego) and Benjamin Leff (American) are presenting tax papers at the Basic Income Earth Network Annual Congress (program) in Lisbon, Portugal:

Miranda Perry Fleischer, Atlas Nods: The Libertarian Case for a Universal Basic Income:

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September 26, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

'When Clients Sneeze, Law Firms Catch A Cold; Law Schools Get The Flu; And Law Students Contract Pneumonia'

Forbes, Who Will Train Tomorrow's Lawyers and How Will They Learn?:

The legal industry is an ecosystem; there’s an inter-dependency between and among its elements. So, for example, when clients sneeze, law firms catch a cold; law schools get the flu; and law students contract pneumonia. A recent American Lawyer article, Pay for Associate Hours? More Companies Say'No Thanks' underscored the interdependency — and misalignment — of law's stakeholders. It quoted from a speech by Mark Smolik, the general counsel of DHL Supply Chain Americas, saying he would no longer subsidize on-the-job-training of law firm associates. That’s an industry secret everyone knows, but it is newsworthy when the GC of a major corporation says it publicly.

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September 26, 2017 in Legal Education | Permalink | Comments (1)

Penn Alumni Speak Out Against Breakdown Of The 'Bourgeois Culture' Op-Ed

Penn (2017)Following up on my previous posts (links below):  Above the Law, Alumni Of Top Law School Speak Out Against Professor:

After co-authoring a delightful op-ed exploring “bourgeois values” as a thinly veiled effort to denigrate women and minorities, Professor Amy Wax of Penn Law School and Professor Larry Alexander of USD Law have gotten their share of deserved criticism from all corners. Not that they didn’t expect to be pilloried — it’s all part of the right-wing martyrdom pageant — but neither probably guessed, when they published this days before Charlottesville, that opposition to this editorial would become a such rallying point for the law school community.

Professors have carefully debunked the shoddy “facts” — mostly unevidenced assertions — that Wax and Alexander laid out in their piece. Student groups have developed action plans to protect students, and the USD administration has made a commitment to address diversity and bias concerns.

It’s one thing for faculty and students to get inspired to make law schools a better place, since they have to deal with that environment every day. But now, Penn alumni have added their voices in response:

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September 26, 2017 in Legal Education | Permalink | Comments (2)

11th Circuit: Gay Man Cannot Deduct Costs To Father Children Through In Vitro Fertilization As Medical Expenses

Morrissey v. United States,  No. 8:15-cv-02736 (11th Cir. Sept. 25, 2017)(citations omitted):

This is a tax case. Fear not, keep reading. In determining whether the IRS properly denied a taxpayer’s claimed deduction on his 2011 return, we must decide two important and (as it turns out) interesting questions. First up: Was the money that a homosexual man paid to father children through in vitro fertilization — and in particular, to identify, retain, compensate, and care for the women who served as an egg donor and a gestational surrogate — spent “for the purpose of affecting” his body’s reproductive “function” within the meaning of I.R.C. § 213? And second: In answering the statutory question “no,” and thus in disallowing the taxpayer’s deduction of his IVF-related expenses, did the IRS violate his right to equal protection of the laws either by infringing a “fundamental right” or by engaging in unconstitutional discrimination?

We hold that the costs of the IVF-related procedures at issue were not paid for the purpose of affecting the taxpayer’s own reproductive function — and therefore are not deductible — and that the IRS did not violate the Constitution in disallowing the deduction. ...

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September 26, 2017 in New Cases, Tax | Permalink | Comments (2)

Kahn: The Business And Personal Casualty Loss Deductions

Florida Tax Review  (2015)Jeffrey H. Kahn (Florida State), The Misfortune of the Deductions for Business and Personal Casualty Losses, 21 Fla. Tax Rev. ___ (2017):

Losses suffered on an individual’s personal property generally are not deductible. One exception to this rule applies when “such losses arise from fire, storm, shipwreck, or other casualty, or from theft.” The principal issue that arises is determining the meaning of the term “other casualty.” Taking what they deemed to be the common elements in the three explicitly identified casualties, the courts and the Internal Revenue Service determined that an event will qualify as an “other casualty” only if it is “sudden, unusual and unexpected.”

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September 26, 2017 in Scholarship, Tax | Permalink | Comments (0)

Reynolds: It Is Time Academics Preach the Virtues They Practice

Following up on my previous posts (links below):  USA Today op-ed:  It Is Time Academics Preach the Virtues They Practice, by Glenn Harlan Reynolds (Tennessee):

Last week, ironic juxtaposition came to San Diego. University of San Diego Law Dean Stephen Ferruolo issued a statement critical of one of his faculty, Larry Alexander, who had committed the sin of coauthoring an oped with Amy Wax of Penn Law School. The two professors praised the “bourgeois virtues.” Also in San Diego that week, crews began hosing things down with bleach solution in an effort to halt a hepatitis A outbreak spread by people pooping in the street.  And within the academy itself, the bourgeois virtues are seldom praised but often practiced. Nobody is better at deferring gratification than a graduate student or junior professor. In their own lives, most professors are quite temperate and hardworking. Their children are almost always encouraged to work hard, go to good schools, and get good jobs, and academic parents are inclined to brag when they do. (The original “Tiger Mom,” Amy Chua, is herself a law professor.) ...

University of Chicago law professor Brian Leiter has called on Ferruolo to apologize or resign for his attack on Alexander and Wax. Leiter writes:  “As Dean, his job is to defend freedom of speech and inquiry, even when it is unpopular. He has failed.”

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September 26, 2017 in Legal Education | Permalink | Comments (0)

Thimmesch: Tax Privacy?

Adam B. Thimmesch (Nebraska), Tax Privacy?, 89 Temp. L. Rev. ___ (2017):

Legal scholars have discussed the concept of privacy at length, but that discussion has virtually ignored the federal income tax and its impact on individual privacy. Tax privacy has developed in that void to mean only a limited right of confidentiality notwithstanding the Tax Code’s extensive use of personal information. That limited form of privacy is at odds with how scholars generally view privacy and fails to account for the numerous privacy interests identified in the broader literature. Recent tax scholarship has recognized this deficiency and has called for greater academic attention to tax-privacy interests. What is missing in the current literature, though, is a discussion of what exactly tax privacy means. This Article fills that void.

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September 26, 2017 in Scholarship, Tax | Permalink | Comments (1)

Monday, September 25, 2017

PwC Launches U.S. Law Firm, Seeks Market Share From BigLaw, Especially In Tax

PWCNew York Times DealBook:  PwC, the Accounting Giant, Will Open a Law Firm in the U.S., by Elizabeth Olson:

Law firms already elbowing one another for multinational clients will soon have a new competitor: The Big Four accounting firm PwC, formerly known as PricewaterhouseCoopers, plans to open a law firm in Washington, D.C., next week.

The law firm, ILC Legal, will advise clients on international matters such as corporate restructuring. Its lawyers will act as special legal consultants, rather than fully licensed United States lawyers, allowing them to provide counsel on foreign law but not United States law.

ILC Legal, nonetheless, aims to vie with big law firms as a one-stop shop offering multinational companies access to other PwC services, including tax consulting and its network of 3,200 lawyers spread across 90 countries. The firms in that network operate separately but follow the same standards and practices under the PwC brand name. ...

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September 25, 2017 in Legal Education | Permalink | Comments (2)

Should Student Evaluations Rate A Professor's Inclusiveness?

Student Evaluations (2017)Inside Higher Ed, Should Students Be Asked if Professors Are Inclusive?:

Ball State University promotes diversity and does not tolerate discrimination. Everyone says they can agree on that.

But the best way to gauge how professors live up to that standard isn’t quite settled, as the Ball State Faculty Council discovered in its most recent meeting.

Last year, Charlene Alexander, who was then the university’s associate provost for diversity and director of the Office of Institutional Diversity, introduced an open-ended question for the Faculty Council to potentially use on the teaching evaluations that are offered to students at the end of a course. Alexander has since moved on to Oregon State University, but the council took up the question in this month's meeting.

“The university does not tolerate discrimination and is committed to work with diversity in a wholly positive way,” the text reads. “Please indicate below anything in relation to this course that supports or runs counter to this objective.”

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September 25, 2017 in Legal Education | Permalink | Comments (3)

Mazur: Social Impact Bonds As A Tax-Favored Investment

Orly Mazur (SMU), Social Impact Bonds: A Tax-Favored Investment?:

Social impact bonds (SIBs) have recently generated a lot of excitement nationwide as an innovative way to finance social projects. A SIB is a financing mechanism that uses private capital to fund social services, with the government only repaying investors their capital plus a potential return on investment if improved social outcomes are achieved. As such, it brings together the private, public and non-profit sector in a manner that unlocks an additional source of capital to fund social service providers, promotes innovation, encourages interagency cooperation and creates more accountability. Despite these benefits, the tax law likely hinders the development of SIB-funded programs in the United States by discouraging private investment in SIBs.

This Article is the first to consider the role of the U.S. tax law in promoting SIB investments by examining the tax implications of a SIB investment from both a doctrinal and policy perspective.

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September 25, 2017 in Scholarship, Tax | Permalink | Comments (0)

L.A. Times: University Of California Is Handing Out Generous Pensions, And Students Are Paying The Price With Higher Tuition

University of California (2015)Los Angeles Times, UC Is Handing Out Generous Pensions, and Students Are Paying the Price With Higher Tuition:

As parents and students start writing checks for the first in-state tuition hike in seven years at the University of California, they hope the extra money will buy a better education.

But a big chunk of that new money — perhaps tens of millions of dollars — will go to pay for the faculty’s increasingly generous retirements.

Last year, more than 5,400 UC retirees received pensions over $100,000. Someone without a pension would need savings between $2 million and $3 million to guarantee a similar income in retirement.

The number of UC retirees collecting six-figure pensions has increased 60% since 2012, a Times analysis of university data shows. Nearly three dozen received pensions in excess of $300,000 last year, four times as many as in 2012. Among those joining the top echelon was former UC President Mark Yudof, who worked at the university for only seven years — including one year on paid sabbatical and another in which he taught one class per semester.

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September 25, 2017 in Legal Education | Permalink | Comments (5)

Kleinbard: A Grand Bipartisan Bargain On Tax Reform — Fund Lower Corporate Rates With A Carbon Tax

Wall Street Journel op-ed:  A Grand Bipartisan Bargain on Tax Reform, by Edward Kleinbard (USC):

A levy on carbon would satisfy Democrats, while Republicans would get far lower corporate rates.

As Republicans take on tax reform, they seem hell-bent on repeating the tactical mistakes they made during their attempts at health-care reform. Again GOP policy makers have cloistered themselves to develop a bill whose prospects will hang by a thread in the Senate. Yet there is a powerful bipartisan grand bargain in corporate tax policy waiting to be struck.

Democratic and Republican policy makers agree that the corporate tax system is irredeemably broken. They even concur on the broad direction of a replacement system—lower rates and fewer loopholes. But the two parties are far apart on the most important issues in corporate tax reform: what exactly the new corporate tax rate will be, and whether companies can write off their business investments in the year those investments are made. ...

Republicans are between a rock and a hard place. Growth comes from a permanent low corporate tax rate, not one that expires in 10 years. The GOP should embrace a new revenue-raiser that can attract moderate Democrats without undercutting the economic benefits of reform. The answer? A carbon tax, which raises revenue, satisfies long-term economic efficiency and environmental goals, and is as important to Democrats as corporate tax rate reduction is to Republicans.

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September 25, 2017 in Tax | Permalink | Comments (2)

Muller: Projected School-By-School Improvement If California Drops Bar Exam Cut Score From 144 To 139

Derek Muller (Pepperdine), How a Change in the Bar Exam Cut Score Could Alter California Legal Education:

Virtually all the deans of law schools in California, of ABA-accredited and California-accredited schools, have come out in favor, at multiple stages, of lowering the cut score for the California bar exam. The score, 144, is the second-highest in the country and has long been this high. ...

The State Bar, in a narrowly-divided 6-5 vote, recommended three options to the California Supreme Court: keep the score; lower it to 141.1; or lower it to 139. ... The Court could adopt none of these options, but I imagine it would be inclined to adopt a recommended standard, and probably the lowest standard at that, 139. ...

The chart below illustrates a very rough projection of the improvement in performance of each school from the July 2016 bar exam if the score had been lowered to 139. ...

Muller

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September 25, 2017 in Legal Education | Permalink | Comments (0)

New European Commission Report On The Taxation Of The Digital Single Market

European_CommissionThe European Commission published a new report on Thursday, September 21, 2017, on the taxation of the digital economy:  Communication from the Commission to the European Parliament and the Council: A Fair and Efficient Tax System in the European Union for the Digital Single Market:

The Digital Single Market (DSM) is one of the 10 political priorities of the European Commission. The DSM strategy1 aims to open up digital opportunities for people and businesses in a market of over 500 million EU consumers. Completing the Digital Single Market could contribute to EUR 415 billion per year to Europe's economy, create jobs and transform our public services. In the 18 months following the adoption of the DSM Strategy, the European Commission delivered the announced proposals. In the mid-term review of the strategy 2 it has updated its analysis and focused on the next series of challenges. Digital technologies are transforming our world and having an important impact on taxation systems. They help improving their management, offering solutions to reduce administrative burdens, facilitate collaboration between tax authorities, and address tax evasion. However, they transform business models, with intangibles playing an increasingly important role, putting pressure on Europe's taxation system.

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September 25, 2017 in Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, September 24, 2017

Gamage & Shanske: Using Taxes To Support Multiple Health Insurance Risk Pools

David Gamage (Indiana) & Darien Shanske (UC-Davis), Using Taxes to Support Multiple Health Insurance Risk Pools, 85 State Tax Notes 871 (Aug. 28, 2017):

In most markets, it is considered desirable for consumers to have more choices. But health insurance regulation is different. When it comes to health insurance, giving consumers more choices can result in the market collapsing — leaving the sickest and most needy consumers without any good choices at all. To mitigate this problem, the Affordable Care Act’s Exchanges were designed around maintaining a single exchange-based risk pool. However, one problem with this approach taken by the Affordable Care Act is that the regulations designed to maintain the single exchange-based risk pool have the side effect of limiting some potentially positive aspects of consumer choice and provider competition.

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September 24, 2017 in Scholarship, Tax | Permalink | Comments (0)

IFA International Tax Student Writing Competition

IFA Logo (2015)The International Fiscal Association is sponsoring the 2017 International Tax Student Writing Competition:

Subject:  Any topic relating to U.S. taxation of income from international activities, including taxation under U.S. tax treaties.

  • Open to:  All students during the 2016-17 academic year pursuing a graduate degree. Any appropriate papers written in fall 2016 or spring and summer 2017.
  • Submission Deadline:  September 30, 2017.
  • Prize:  $2,000 cash, plus expenses-paid invitation to the IFA USA Branch Annual Meeting in February 2018.

Here are the recent winners:

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September 24, 2017 in Legal Education, Scholarship, Tax, Teaching | Permalink | Comments (0)

BYU To Start Selling Caffeinated Soft Drinks On Campus

The Top Five New Tax Papers

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's list:

  1. [640 Downloads]  Federal Tax Procedure (2017 Practitioner Ed.), by John Townsend (Houston)
  2. [347 Downloads]  Is Efficiency Biased?, by Zachary Liscow (Yale)
  3. [240 Downloads]  When Did Tax Avoidance Become Respectable?, by Steven Bank (UCLA)
  4. [162 Downloads]  Codification of the Tax Law and the Emergence of the Staff of the Joint Committee on Taxation, by George Yin (Virginia)
  5. [151 Downloads]  Distributive Justice and Donative Intent, by Alexander A. Boni-Saenz (Chicago-Kent)

September 24, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, September 23, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Law Prof (And Associate Dean For Academic Affairs) Kendra Fershee Announces Congressional Bid

KendraKendra Fershee, Associate Dean for Academic Affairs and Professor of Law at West Virginia University College of Law (and fellow Hamilton aficionado), announced on Thursday she is running for Congress as a Democrat in West Virginia's First District:

I am a working mom who has dedicated the majority of my professional life to public service. I am a law professor, a family law expert, and a mom of two kids. I’ve been married to the love of my life for almost nineteen years, and together we’ve built a life in West Virginia.

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September 23, 2017 in Legal Education | Permalink | Comments (1)